What is staking? Surely, when you learn all the other necessary terms and steps like initial coin offering, coins, and crypto, the next step is to learn what staking is. Staking refers to the crypto feature that lets users make their digital assets work for them, earning passive income without the need to sell these assets. This is done by locking up these cryptocurrencies in the target wallet for a certain amount of time and then opening them up again to receive rewards that the original person has gained. When you do staking, not only are you making a living off this passive income and benefiting from it, but you are also participating in the process of decentralization, just like what a company does. When you buy shares, you are also getting a percentage of the company as it also delegates their tasks of decision-making onto those who buy it. This works the same with staking. To know more about what staking is, better if you pay attention to the following steps.
Now that we got the "what is staking?" question out of the way, we can learn how to do it. In order to stake, it's crucial to collect all the necessary documents first, like the Proof Of Stake, to lock the coins and enable a person to validate the transactions being done. Fun fact, it is safer to do transactions using Proof Of Stake instead of Proof Of Work because it requires a lot of resources to hack the network.
Before doing anything, it is, of course, important that a person recognizes which cryptocurrencies actually offer the option for staking. Other than that, it is important that the user cross-checks everything important, including the performance history, reports, management track records, etc., before doing anything as they must make sure that the coin that they are buying is legit and a good investment. This can be observed through their whitepapers, a document that states all of the necessary information pertaining to a coin.
All of these are necessary measures because, without them, it is easy to fall into the traps of a fraud investment just because of our lack of care for whitepapers or the red flags available. Thus, it's important to remember the criteria of a good investment and avoid those red flags at all costs.
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Now, after you're done with the process of researching and the preparation needed to buy the crypto, it is time to actually buy the crypto. This may seem like a pretty blunt request for something that requires way more than that. Within these steps, it is important to familiarize yourself with the cryptocurrency features first, so you wouldn't be confused. After doing all of that, you should consider where to make the purchase. The best option for this is to invest in cryptocurrencies that offer a built-in staking feature.
It is also worth noting that not many platforms and cryptocurrencies offer the same option to do staking, so when an individual stakes at a certain platform, it doesn't guarantee that they will be able to move that asset or transaction elsewhere. We must buy cryptocurrency that we actually have a full understanding of. When we simply buy things based on trends, we don't know if the crypto bought is of quality or has longevity.
If an exchange is used, it is likely that it has a staking option that you can use. If there is any confusion, the exchange also has a guide for you to learn. Exchange refers to software that gives you a crypto wallet but doesn't necessarily give control over it. An exchange also gives you the access to convert real money into crypto.
Besides that, there is also an art in which platform, CEX, wallet, and location of staking that you are picking. There are many options, including Binance, in which you can have over 90 options. There's also Coinbase, Ledger, Trezor, Figment Network, and Stake Capital.
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When it comes to staking, there are actually multiple methods in which you can perform. The first one refers to betting on everything and every time. This is when you put all of your capital into your investments. The best thing about this is the fact that you would get the biggest amount of yields in the shortest amount of time, even though it is a risky choice.
The second method is by limiting the investment to a fixed same amount for each bet. By doing so, the individual might get low yields for a long amount of time, but it is the safest option. Doing this eliminates the opportunity of going bankrupt since there is a much higher chance of getting a bingo for a good investment coin.
The third choice is called the Martingale method, where you are required to double the amount of bets on the next investment if you lost the bet on the previous one. This is done to cover losses and can be a faster way of earning capital compared to the fixed bet one.
Once you realize how beneficial your investments are and that you want to do them again in order to yield more capital and money, you should repeat these steps in order to gain more. Besides that, repetition is a great key if you want to keep the steps remembered, the first try might not have been successful, and that's okay. This is why there need to be more tries in order to keep the momentum going and in order to learn from previous mistakes. Maybe this extra opportunity can be a chance to explore other methods of staking.
These steps are actually simple. Hopefully, this guide can help whoever is still struggling and typing "what is staking" in their search bars. The process of staking can be an economically beneficial thing if you know how to play your cards well.